The Federal Reserve Board released its triennial survey of consumer finances for the 2004-2007 period. The headlines: Our debt payments increased more rapidly than our pay. The rich got richer while most people saw incomes flatten or decline.

There are other unsettling findings, in light of tomorrow's foreclosure-relief plan announcement. Families with the most debt relative to their incomes also were more likely to lack enough savings to stave off foreclosure. And, higher-income families took on dangerous levels of debt at a more rapid rate from 2004-07 than lower-income families.

More details below....

Obviously, lenders disregarded these precarious financial conditions when making these loans.

These families will not be in good shape in a downturn marked by mass layoffs and pay cuts.

Highlights from the survey report:

THE RICH GOT RICHER

The median-value of inflation adjusted, pre-tax income was unchanged between 2004-07. But the average income jumped 8.5 percent. Differences between those rates suggest a change in how income is distributed. In other words, incomes for the wealthy increased dramatically, they skewed the average upward. They can't skew the median, however. The median is the midpoint in the entire range of income numbers. Most of us, in other words, have seen little improvement in our standard of living over the last three years.

CREDIT CARD BALANCES JUMPED

Seven in 10 families own a credit card. Only six in 10 of them maintain a balance. But the average credit card balance increased 30 percent between 2004 and 2007 to $7,500. In 1989, the average balance was less than $3,000.

DANGEROUS DEBT LEVELS INCREASED

This is the more troubling development. More families took on large debt burdens, particularly those already well-off. And fewer of those heavy debtors had emergency savings in case things went wrong.

Between 2004 and 2007, the proportion of people in debt whose monthly payments exceeded 40 percent of their income rose 2.5 percentage points to 14.7 percent. That's the highest level since the survey began in the late 1980s. That debt includes total monthly payments on mortgages, credit cards, home equity lines of credit and loans for education and autos, as well as other miscellaneous debt.

Among all families with debt, more than half (58 percent) had balances in their checking, savings or money market accounts to cover at least three months of mortgage, credit-card and other debt payments.

That's the good news.

But among families whose loan payments exceeding 40 percent of their income, only one in four (26 percent) had three months of debt payments in bank or money market accounts.

In other words, the folks who took on riskier levels of debt were not savers. They were more likely to lack a cushion to fall back on. And lenders gave these families loans with little regard for this financial conditions.

Think this is a problem for the poor? Think again. The poorest families aren't the ones who substantially boosted their risk. They've always deep in debt because they have less income. Between 25 and 30 percent of the lowest fifth of income-earning families have had debt-to-income ratios of 40% or more over the past two decades. In 2007, that proportion was at 27 percent.

But between 1989 and 2007, the proportion of households in the top income brackets who took on high debt-to-income ratios more than doubled.

Families in the 60-79% income range jumped from 7.1% in 2004 to 12.7% in 2007. In the 80-89% income range, the ratio with high debt-to-income ratios jumped from from 2.8% to 8.6%. Here's a cheap chart of the numbers: Download file

In other words, those with means pushed even harder to live at or beyond them. This suggests that foreclosed homes will spread from Wall Street to Main Street, uptown to downtown. And a pay cut or a reduction in hours will put a broader swath of workers over the edge.